Austria's OMV stands by Iran project but no investment yet

VIENNA (Reuters) - Austrian energy group OMV is continuing with planned Iranian energy projects despite the United States’ withdrawal from a nuclear pact with Tehran, but said on Tuesday it had made no investments there yet.

FILE PHOTO: The logo of Austrian oil and gas group OMV is pictured at its headquarters in Vienna, Austria, January 21, 2016. REUTERS/Heinz-Peter Bader/File Photo

European firms doing business in Iran face U.S. sanctions after President Donald Trump withdrew from a deal between the U.S., France, Germany, Britain, Russia, China and Iran, which lifted sanctions in exchange for Tehran limiting its nuclear program.

The other signatories have indicated that they hope to salvage the deal. French finance minister Bruno Le Maire brought up the idea that the European Union could compensate European companies that might face U.S. sanctions.

Last week, French energy giant Total joined other European companies in signaling a possible exit from Iran in light of Trump’s decision.

OMV was monitoring political developments in the U.S. and the European Union very closely, OMV’s upstream chief Johann Pleininger told its annual shareholder meeting in Vienna.

“The project has not come to a standstill, it is continuing,” Pleininger said with regard to Iran, adding that “no investments have been made yet”.

The Austrian group, which generates the bulk of its profit in Europe, started operations in Iran in 2001 as the operator of the Mehr exploration block in the west of the country.

OMV halted operations in 2006 due to sanctions, but following sanctions relief it signed in May 2016 a memorandum with the National Iranian Oil Company (NIOC) for projects located in the Zagros area in the west and the Fars field in the south, where foreign firms often need a local partner.

In June 2017, OMV and Russia’s Gazprom Neft announced a memorandum of understanding to work in Iran’s oil sector.

At last year’s shareholders meeting, Pleininger said the NIOC still owed OMV $48 million. OMV bought Iranian crude oil in April, a spokesman said this month but did give any more detail.

OMV is Austria’s former state petroleum company and the government still holds a 31.5 percent stake. Its second-biggest investor is Abu Dhabi industrial group Mubadala Investment with 24.9 percent.